Shares in mutual fund companies take off

Nevertheless, a few fund companies remain relatively cheap. For example, Legg Masonlm gained about 13% this year. The company's flagship funds have turned in a lousy performance the past 12 months. Nevertheless, Jim Grant, editor of Grant's Interest Rate Observer, writes that Legg could yet catch up with its peers.

More daring investors might consider U.S. Global GROW, a small fund company that's a favorite among gold investors. Cohen & Steers CNS is a noted investor in real estate investment trusts, and should do well as that sector turns around.

But you might do just as well investing in Charles Schwab schw, the discount brokerage, or in its rival TD Ameritradeamtd. Both have thriving businesses selling mutual funds as well as exchange-traded funds. And both sell at much more reasonable prices compared with earnings than most fund company stocks. And, should this bull market keep charging, they should outpace most funds.

John Waggoner is a personal finance columnist for USA TODAY. His Investing column appears Fridays. new book,Bailout: What the Rescue of Bear Stearns and the Credit Crisis Mean for Your Investments, is available through John Wiley & Sons. Click here for an index of Investing columns. His e-mail is jwaggoner@usatoday.com. Twitter: www.twitter.com/johnwaggoner.

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